Adam Atkinson-Lewis, Director, Energy Storage Strategic Market Development
2025 has been a big year for energy storage worldwide. Multiple regions exceeded expectations: the U.S. surpassed the 2017 projection of 35 GW to reach over 40 GW by Q3 2025—second only to China in absolute growth—Europe recorded a 45% year-on-year BESS expansion, and Australia officially became the world’s third largest utility-scale BESS market, after China and the U.S.
This growth was not without its barriers for energy storage integrators and developers, however. Supply dynamics were disrupted by a sharp increase in Chinese companies offering a broad array of commoditised DC-block solutions and the bankruptcy of a major integrator, and global trade challenges made project development more difficult amid tariff uncertainty and geopolitical tensions. Together, these headwinds sharpened an emerging divide in the market: some BESS developers in simpler operating environments prioritised the lowest cost solutions, while others with more demanding performance requirements chose to invest in long-term partners capable of delivering proven safety and high-performance equipment on spec and on time.
This year, we were proud to commission projects with developers, IPPs, and utilities that share our commitment to partnership and doing business the right way. We commissioned Europe’s largest BESS and delivered the first project (Zenobē’s Blackhillock) to provide grid stability to the UK’s National Grid through its Pathfinder programme. We integrated storage and achieved grid compliance across some of the world’s most demanding markets, including Chile and Australia, where evolving market structures underscored the value of contracting with an experienced team to ensure compliance with continuously changing grid requirements. In the United States, we secured our eighteenth project with a major utility to support large load changes and maintain grid stability without costly transmission upgrades.
These examples underscore the increasingly diverse, high-value, and complex ways batteries are being deployed to enhance grid reliability, resiliency, flexibility, and affordability. Around the world, markets are prioritising energy storage to unlock its full potential as a low-cost reliability enabler. As electrification and data centres continue to push the limits of the grid, the fast response and flexibility of batteries—enabled by sophisticated controls and optimisation software—are increasingly getting the recognition they warrant in regulatory and market design. From utility scale to microgrids, batteries are a crucial addition to reliable, low-cost energy systems and their impact will only expand in 2026 as costs drop and market utilisation of BESS improves atop the increasingly established safety performance of modern energy storage systems.
Below are our 2026 energy storage predictions, featuring insights from our regional strategic development teams.
Joanna Martin Ziegenfuss, Market Development General Manager, Energy Storage
We anticipate an acceleration in BESS deployments in the United States driven by two simultaneous growth factors: FERC’s 2026 rulemaking aimed at improving grid resiliency and reliability, and the continuing growth of data centre developments.
Four FERC reforms that will drive-up the demand for BESS:
The data centre market in the U.S. is anticipated to grow to 60 GW in 2026 driven by the unceasing demand for information at ever faster speed. BESS’s functional versatility is increasingly recognised as a key asset for data centre power generation, resilience and reliability. Priority features valued by customers for whom any downtime is unacceptable and speed to power is king. These high standards will drive a demarcation within BESS suppliers differentiating those that can reliably deliver to the required standards with associates sophisticated software, such as Wärtsilä.
Henrik Tuveson, Market Development Senior Manager, Latin America, Energy Storage
Chile has long been a leader in renewables, and storage is finally catching up. With 1 GW in operation, 4 GW under construction, there 8 GW approved, and another 14 GW in the qualification process, its ambitious storage goals are exceeding growth expectations. This growth will continue through 2026, driven by renewable curtailment, low costs, and a secure business model for BESS assets in Chile.
The Chilean grid codes will likely evolve come 2026, with grid-forming capabilities becoming mandatory for BESS. This will make advanced software crucial to meeting grid codes, with power plant controller retrofits likely becoming more common as asset owners need to swap out more basic controllers with sophisticated software. This software will also be needed to capitalise on additional revenue streams that will become available with ancillary services markets.
Caroline O'Connor, Market Development General Manager, UK and Europe
Europe and the UK will continue prioritising grid resiliency and stability, with grid requirements in both jurisdictions continuing to strengthen come the new year. This will mean a greater focus for asset owners on the advanced software needed to execute these grid services and harness the new revenue opportunities they provide.
As a continued trend from 2025, Europe is evolving its grid codes to address the challenge of decreasing inertia as renewables replace traditional generators. After a devastating grid failure hit Spain and Portugal last April, the true value of BESS, alongside the advanced software that enables its smart control, is filling this critical reliability gap alongside grid-forming inverters with synthetic inertia (learn more in our Insights article.) Per updated grid codes and forthcoming revisions to the EU’s NC RfG, for both renewables and storage projects larger than 1 MW will be required to contain this inertia and grid-forming capability.
The UK is already setting the pace on grid stability through the Pathfinder programme. Zenobē, in partnership with Wärtsilä, has been awarded the first two systems under the initiative; the Blackhillock site is now operational (see the case study). Starting in January 2026, Germany will roll out grid inertia services with fixed-price, multi-year agreements (around two to ten years) for certified grid-forming projects, opening significant new revenue streams for storage owners.
Kashish Shah, Market Development Manager, Australia & APAC, Energy Storage
Year-on-year, Australia’s NEM saw a 150% increase in energy storage deployment. With close to 10 GW of BESS expected to be operational in the NEM by mid-2026, optimising these assets to ensure an edge in an increasingly competitive market will be critical for financial success. Advanced software can lengthen an asset’s lifespan, optimise bidding, and minimise downtown, all fundamental to ensure your asset is ready to perform during the most lucrative times.
Despite support from government-backed revenue certainty many large-scale BESS projects continue to struggle with securing financing. However, transmission network service providers (TNSPs), distribution network service providers (DNSPs) and many developers are quickly catching on to the faster-to-deploy sub-5 MW market opportunity. These BESS are strategically placed along the transmission and distribution networks to soak up excess rooftop solar on the distribution networks to provide grid services like energy shifting or frequency regulation, while enhancing grid reliability and helping avoid costly grid upgrades.
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